The following is an expert witness deposition I wrote in April 2018 in response to a subpoena in a small claims lawsuit against Amazon by an individual in California who Amazon had stolen $3,400 in gift card balances from. In this deposition, I lay out several potential rationales for having a large Amazon gift card balance, detail why Amazon acts in bad faith when blacklisting customers and seizing their gift card balances, and explain how their practices are in violation of state and federal laws.

Regarding the case at hand, I have not heard from the plaintiff since May 2018, so I believe they were successful in recovering funds from Amazon.com, but stopped responding because they signed one of Amazon’s many non-disclosure agreements.

In November 2018, the author of the Miles Per Day blog was banned by Amazon. Amazon proceeded to cancel her outstanding orders and steal over $1,500 in gift card balance, even though she purchased her gift cards from first-party sources to earn credit card rewards miles and points. This prompted me to publish my April 2018 deposition, shown below.

IN THE TURLOCK DIVISION OF THE SUPERIOR COURT
OF CALIFORNIA, COUNTY OF STANISLAUS

[Redacted],

vs.

Amazon.com, Inc.,
Defendant.

SMALL CLAIMS CASE NO. [Redacted]
___________________________________

DEPOSITION FROM EXPERT WITNESS RICHARD THRIPP

Mr. [Redacted], having read articles on my website about my experience of being blacklisted by Amazon.com, Inc. (“Amazon”) and having my gift card balance stolen, has reached out to me and subpoenaed my testimony as an expert witness in her California small claims case. I am a non-lawyer and this is my first time being deposed in this capacity, which I am doing for free to shed light on practices by Amazon that I believe to be unlawful.

Amazon sells gift cards for its merchandise and services, both through its website and nationwide at most grocery stores, drugstores, gas stations, and other retailers through its subsidiary, ACI Gift Cards, LLC, a Washington limited liability company. These gift cards come as “redemption codes” that are loaded onto one’s Amazon customer account. They function differently than gift cards for many other retailers (e.g., Walmart or Target), because once they are loaded to a customer account, they are permanently bound to that account and can be redeemed against future orders only on that Amazon account.

Since 2008, many customers have complained online about having their Amazon accounts blacklisted and being stonewalled when requesting an explanation from the company. I experienced this in August 2015, on my Amazon account which had a gift card balance of $451.20.

The first signs of being blacklisted are receiving an error message about your password being incorrect when attempting to log in. The error message persists after resetting your password, and representatives at Amazon’s customer support call center will say there is a problem with your account that requires a specialist to call you back within 24–48 business hours. These statements are false, because no specialist ever calls back.

Because you are locked out of your Amazon account, you are unable to view your gift card balance, gift card activity, orders, and other customer data. Amazon will not accept returns from a blacklisted customer, even for items defective or damaged in shipment. They remove access to purchased digital materials (e.g., Kindle e-books), do not honor textbook rental return-shipping agreements, and if you have purchased an Amazon Prime membership, they refuse to offer a pro-rated refund. Most importantly, they outright refuse to return your gift card balance, in violation of the U.S. federal and state laws.

On 9/04/2015, I filed a complaint with the Attorney General of Washington against Amazon. The following is an actual response received 9/19/2015:

Dear Andrew,

I’m Suresh Potnuru of Amazon.com. I’m responding to Mr. Richard Thripp’s subject matter complaint, and copying him for his reference.

I’m sorry for the trouble Mr. Thripp’s had in accessing his account.

I’d like to confirm the information Mr. Thripp’s received from our Account Specialist team is correct. As noted in our Conditions of Use, in the section, “Your Account”: “Amazon reserves the right to refuse service, terminate accounts, remove or edit content, or cancel orders in its sole discretion.”

Due to the proprietary nature of our business, we’re unable to discuss with Mr. Thripp, and the decision to close his account is a final one.

Regarding gift card balance: At this time we may not be able to issue a refund to Mr. Thripp for his gift card balance. [Emphasis added.]

Please contact me directly by replying to this email if I can be of further assistance.

Best regards,
Suresh P.
Amazon.com

Additional complaints against Amazon resulted in them making these statements:

Please note this isn’t a decision we can reconsider, and we won’t be able to issue a refund for the gift card balance. [Emphasis added]

I realize you’re upset, and I regret we’ve been unable to address your concerns to your satisfaction. However, we’ll not be able to offer any additional insight or action on these matters, and any further inquiries on this matter won’t receive a response.

You must return your rental prior to the scheduled due date in order to avoid any additional charges. You can return the rental using the carrier of your choice. Since you’re not using a pre-paid mailing label provided by Amazon, you’ll be responsible for any return shipping fees. [The textbook rental agreement that I agreed to when renting from Amazon Warehouse Deals stated that Amazon would provide a pre-paid mailing label for return of the textbook. Obviously, I could not print the pre-paid mailing label due to being unable to log in.]

Eventually, I sued Amazon in Volusia County, FL small claims court and reached a confidential settlement agreement. However, due to my blog posts, I receive 2–3 emails per month from blacklisted Amazon customers who are receiving similar treatment from Amazon.

Amazon’s Conditions of Use state that they can terminate a customer account at any time. Amazon’s terms on gift cards state:

We reserve the right, without notice to you, to void Gift Cards (including as a component of your Amazon.com Balance) without a refund, suspend or terminate customer accounts, suspend or terminate the ability to use our services, cancel or limit orders, and bill alternative forms of payment if we suspect that a Gift Card is obtained, used, or applied to an Amazon.com account (or your Amazon.com Balance is applied to a purchase) fraudulently, unlawfully, or otherwise in violation of these terms and conditions. [Emphasis added.]

Just because customers agree to these terms by using Amazon gift cards does not mean the terms are lawful. In fact, the above terms are void according to California Civil Code, Section 1749.51. As we have seen, Amazon blacklists customers without explanation “due to the proprietary nature of their business.” Amazon is incentivized to blacklist customers with high gift card balances, and they act opaquely and without oversight in reaching these decisions.

A customer’s violation of Amazon’s terms does not automatically entitle Amazon to seize their gift card balance. When Amazon blacklists a customer, they make no attempt to refund all or part of the gift card balance, even if they suspect only a portion was obtained unlawfully or in violation of their terms.

Amazon customers can add multiple gift cards to their account balance, and a natural characteristic of gift cards is that they may come as gifts from third parties. An Amazon customer may not know the gift card they have received was, for example, purchased with a stolen bank card. If a bank customer were to deposit a bad check, the bank would not be entitled to seize the entire balance of their checking account.

Amazon acts as a bully toward blacklisted customers. Per their terms, binding arbitration and small claims court are the only avenues available for blacklisted customers to petition for redress (besides attorneys general, the Better Business Bureau, etc.).

In Mr. [Redacted]’s case, he has informed me that Amazon banned several of her customer accounts with gift card balances aggregating to approximately $3,400. It is not necessarily unlawful for an Amazon customer to have multiple accounts, and there are many legitimate reasons to accumulate gift card balances in the thousands of dollars. For example, a customer might purchase Amazon gift cards at an authorized seller, such as a grocery store, to avoid the possibility of debit or credit card fraud when shopping online. Another possibility is that a customer may purchase Amazon gift cards at a grocery store using a credit card such as Chase Freedom or Discover It, which frequently offer 5% in cashback rewards on purchases at grocery stores. If, during such a promotional period, a customer was to use their Chase Freedom or Discover It credit card directly on Amazon’s website, they would only earn 1% in cashback rewards, rather than 5% cashback rewards earned by first purchasing an Amazon gift card at a grocery store.

In addition, customers not familiar with Amazon’s practice of blacklisting customers may believe they are safeguarding their gift card by loading it to their account long before using it, to prevent others from illegitimately guessing or hacking the redemption code to fraudulently add it to their account.

Moreover, Amazon’s practices may be in violation of these federal and state laws:

The CREDIT CARD ACCOUNTABILITY RESPONSIBILITY AND DISCLOSURE ACT OF 2009 (Public Law 111–24), Title IV, states that it is unlawful to sell a gift card that is subject to an expiration date. When Amazon blacklists a customer and refuses to honor their gift card balance, it may be construed as unlawfully causing the accountholder’s gift card balance to expire.

Chapter 19.240 of the Revised Code of Washington additionally prohibits merchants from issuing gift cards subject to expiration dates, unless the gift card is issued as a donation to a charitable organization or several other exclusions that are not relevant to the Amazon gift cards in question.

California Civil Code, Section 1749.6(a) states: A gift certificate constitutes value held in trust by the issuer of the gift certificate on behalf of the beneficiary of the gift certificate. The value represented by the gift certificate belongs to the beneficiary, or to the legal representative of the beneficiary to the extent provided by law, and not to the issuer. [Emphasis added]

California Civil Code, Section 1749.51 states: Any waiver of the provisions of this title is contrary to public policy, and is void and unenforceable. Therefore, Amazon’s Conditions of Use and aforementioned gift card terms are void and unenforceable according to California law.

Given the above facts, I believe Amazon acts in bad faith, and should pay the gift card balance owed to Mr. [Redacted], or explain their position to the court. Based on my understanding, although pretrial discovery is not permitted in California small claims court, the court “can also order a defendant to do something, as long as [the plaintiff is] also asking for money in [their] claim” (http://www.scscourt.org/self_help/small_claims/small_claims_overview.shtml).

I am the duly authorized custodian of records for the above information and statements received from AMAZON.COM, INC. and have the authority to certify the records.

The quotations included hereto are true excerpts of records on file with RICHARD THRIPP described in the subpoena. Emphasis (bold text) is added where indicated in brackets. In certain places, explanatory text has also been added in brackets. (Additionally: Quotations are also on file with the Consumer Protection Division of the Washington State Office of the Attorney General; the Florida Department of Agriculture & Consumer Services File # 1509-37467 / MLH; and/or the Better Business Bureau of Alaska, Oregon, & Western Washington Complaint # 10830673.)

The records were prepared by RICHARD THRIPP in the ordinary course of business at or near the time of the act, condition, or event.

I declare, under penalty of perjury, that the foregoing is true and correct.

Executed on April 24, 2018, in Ormond Beach, Florida.

___________________________________

RICHARD THRIPP

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that the above deposition is a truthful accounting of the facts. I have furnished copies by U.S. Mail to the Stanislaus County Superior Court and Amazon.com, Inc., this 24th day of April, 2018.

omg please tell me you can help me. here is quick version of what happened

I buy $2,200 in gift cards with cash at Wal greens to make a purchase on amazon with. I load the giftcardds to my amazon account and then I have AMAZON ask me to verify my account, I verify it then AMAZON asks for the bank to fax them proof of my name address and account. My bank is a prepaid Green Dot card and there terms are not to fax my info to anyone, even amazon.

6 weeks later of me faxing the info to amazon and them playing games saying they need the bank to do it. I call amazon up and tell them the bank doesn’t send out my personal info. and we do this whole circle for 8 weeks or so.

Amazon closes my account now for no reason and stole the gift card balance in my account.
I have receipt where I bought all the giftcards with CASH. and they still tell me I wont get it back

Amazon has been unprofitable for many years and only recently has become profitable, so they steal gift card balances as a way of improving profitability. It’s illegal, but no government officials care or do anything about it and even the general public assumes people deserved to have their gift card balance stolen.

With Green Dot as your bank, they probably provide you with statements online or by mail, so I would have faxed them a statement myself (although they asked for the fax to come from the bank rather than you, they might not have noticed the difference). I see that you did this and they claimed they needed it direct from the bank… but the low-level Amazon employees that handle this probably don’t know Green Dot’s fax number.

I have had a couple times where a corporation asked me to have a bank fax them a personalized letter indicating some information about me which banks will usually not do… I used to use NetSpend savings accounts to earn 5% interest and they ended up (after several years) freezing my accounts and demanding a fax from Chase Bank attesting to my legitimacy, which a veteran employee at Chase said they could not provide and she had never heard of a bank asking for this. I ended up getting my money back after explaining to the NetSpend corporate employee that this was ridiculous and I would file complaints and sue in small claims court if necessary, and that I had fought Amazon before and won.

Keep your Walgreens receipt and scan + photocopy it just to be safe. File complaints against Amazon with your state attorney general, the Washington state attorney general, and even the Internet Crime Complaint Center. Of course, if you try to go to a consumer advocate like Elliott.org they are going to say something like “he’s obviously a drug dealer—why would anyone buy $2,200 of Amazon gift cards with cash.” Caveat emptor.